Procurement Supply Chain in Ghana

Procurement Supply Chain in Ghana Charles Allotey Health Access Network 16 th April 2009 MeTA Ghana: CSO & Media Orientation

Introduction

Problems of Medicines and their prices

Med. Supply chain and issues affecting prices

Identify points of transparency

What CSO and Media can do

Problems of medicines and their prices

Medicines have variable prices, often high and unrelated to countries’ income levels;

Medicines are often unaffordable for individuals and are a major burden on government budgets;

The availability of medicines is often poor, especially in public sector facilities;

Trade agreements may severely affect the price and availability of medicines;

Many developing countries have no medicine pricing policies or regulation;

Bu t: little is known about the actual prices people pay and how these prices are set, from the manufacturers’ selling price to the patient price.

Prices of medicines are well above their production costs, and that there is great scope for reductions to improve access. .

Source Of Funds Procurement Agent/Body Point of first warehousing Point of 2 nd warehousing Point of 3th warehousing GOVERNMENT WB GLOBAL FUND USAID CENTRAL MEDICAL STORE Medicines supply systems in GHANA 2007 GAVI ESSENTIAL MEDICINES ARVs MALARIA TB OI ARVs Ped REAGENT Blood safety (+ test HIV) VACCINES CONDOMS Contraceptives MEDICAL SUPPLIES Government Multilateral Donor Bilateral Donor Category of Products color code MOH UNICEF USAID GOVT Of JAPAN UNFPA REGIONAL MEDICAL STORE DISTRICT MEDICAL STORE UN AGENCY Republic of Ghana ITNs D F I D GOVT Of JAPAN FAITH- BASED ORGs POP/ RDF HEALTH FACILITY HEALTH FACILITY FAITH- BASED ORGs FAITH-BASED ORGs DESIGNATED TREATMENT CENTRE UNFPA WHO GDF

International manufacturers Local manufacturers Importers CMS Wholesalers Accra NGO distribution RMS Private hospitals and clinics Public hospitals and clinics Mission hospitals and clinics Wholesalers Regions Private pharmacies Licensed chemical shops

Supply chain: Price component stages

Stage 1: Manufacturer’s selling

price or cost, insurance and freight

Stage 2: Landed price (importation)

Stage 3: Wholesale selling price

Stage 4: Retail selling price

Stage 5: Dispensed medicine price

Factors affecting Medicine Prices along the supply chain R&D and clinical trials Patent Taxes and Tariffs Registration Pricing policy Drug supply Management Manufacturing Drug discovery costs

Supply Chain - Impact on Patient Price: Patient price increases by multiple of ex-factory price 17-24 Feb 2008 MeTA CSO Capacity Building Add-on Imported Locally produced Insurance and freight 10-17% NDA 2% Clearance & finance/banking charges 2% Importer (higher for single source products) 20-70% Wholesaler 2-30% 15% Retailer – typically Pharmacy 125% 105% Drug Shop 85% 115% Clinic 250% 145% TOTAL Pharmacy 150 - 250% 120% Drug Shop 120 - 200% 130% Clinic 280 - 375% 160%

Supply Chain - Impact on Patient Price